Tetra Tech (TTEK) Q1 2026 earnings summary

Executive summary

• Achieved strong start to FY2026 with 8% net revenue growth and 12% operating income growth year-over-year, driven by demand for water, environmental, and defense services, and supported by strategic acquisitions in analytics and advisory.

• Raised FY2026 guidance for net revenue and EPS, positioning for 2030 goals and reflecting robust backlog and major contract wins.

• Backlog reached $5.44 billion ($4.31 billion excluding USAID/DOS), with international revenue comprising up to 48% and growing 13%.

• Board approved a 12% increase in quarterly dividend and completed $50 million in share repurchases in Q1.

• CEO transition announced, with Roger Argus to become CEO after the annual meeting.

Financial highlights

• Q1 FY2026 net revenue was $987 million (excluding USAID/DOS), up 8% year-over-year; as reported, revenue was $1.21 billion.

• Operating income reached $141 million, up 12% year-over-year; adjusted EBITDA margin increased 140 basis points to 14.2%.

• Adjusted EPS was $0.34, GAAP EPS was $0.40, up 17% from Q1 last year.

• Cash flow from operations was $72 million in Q1, with trailing 12-month cash flow over $500 million.

• DSO improved to 51 days, the lowest in over 10 years.

Outlook and guidance

• FY2026 net revenue guidance: $4.15–$4.3 billion; adjusted EPS: $1.46–$1.56.

• Q2 FY2026 net revenue guidance: $975 million–$1.025 billion; adjusted EPS: $0.30–$0.33.

• Guidance includes Providence acquisition but excludes future acquisitions; no significant USAID/DOS revenue expected for the remainder of FY2026.

• International, U.S. commercial, and U.S. federal sectors forecasted to grow 5%-10%; U.S. state and local expected to grow 10%-15%.

• U.S. commercial revenue (excluding renewable energy) anticipated to grow in the second half of FY2026.